National Tax Service Chief Warns Against Tax Evasion Through Property Gifts

The National Tax Service (NTS) Commissioner, Im Kwang-hyun, has issued a strong warning against the practice of circumventing capital gains taxes through illegitimate property gifting, a tactic increasingly employed by multi-homeowners. As reported by Dong-A Ilbo, Commissioner Im pointed to a stark 94.4% surge in property gifts in Seoul during the first quarter of 2026 compared to the previous year, raising serious concerns about the integrity of these transactions. He emphasized that while legitimate gifts are respected, the NTS will rigorously scrutinize those suspected of using gifting as a means to avoid taxes.

“

It is best not to think about fraudulent gifts to avoid taxes.

Commissioner Im illustrated the potential financial benefits of fraudulent gifting with a hypothetical case involving a 3 billion KRW apartment in Daechi-dong. He calculated that selling the property before May 9th would incur 650 million KRW in taxes, whereas gifting it could result in over 1.38 billion KRW in taxes if paid legitimately. This stark contrast fuels the suspicion that many are not paying the full gift tax, thereby engaging in tax evasion. The NTS chief questioned the economic rationality of such gifts when legitimate sales appear to be more tax-efficient, urging taxpayers to reconsider such strategies.

“

The National Tax Service will thoroughly verify all such cases soon, and you may face additional penalties, including a surcharge of up to 40% on the original tax amount.

From a South Korean perspective, the NTS's firm stance is crucial for upholding tax justice and preventing a widening gap between those who comply with tax laws and those who exploit loopholes. The commissioner's direct address via Facebook and his clear articulation of the risks—including a potential 40% surcharge on evaded taxes—aim to deter such behavior. This crackdown is particularly relevant given the government's ongoing efforts to stabilize the real estate market and ensure fair taxation. The NTS's commitment to thorough verification and its offer of guidance underscore the importance of transparency and compliance in the tax system, resonating with the public's desire for a just and equitable society.

“

Tax justice is a very important value.